In the contemporary globalised financial economy, unexpected instabilities can cause harmful turmoil. One of these was witnessed in Turkey, in the 19th of February 2000, when the Prime Minister Bьlent Ecevit and the president Ahmet Necdet Sezer went into a political dispute in a meeting about a corruption investigation. After the tense meeting Mr. Ecevit gave a negative speech about the president to the reporters, and then everything was like a pileup. The political turmoil first affected the financial markets. The stock market collapsed, the currency devaluated harshly, interest rates rocketed to %1.950 and the share prices fell %50 on the Istanbul Stock Exchange. In addition, nearly $6 billion left Turkey in a few hours which made banks stop loaning each other in cash. Therefore, the government had to intervene and the Turkish Central Bank injected billions to keep the financial markets working. For sure the impacts of the crisis were not only sudden and short terms. The extremely high interest rates affected the banks and institutions in the long run when they have to repay their debts. Several banks, such as Demirbank, went in to receivership in these conditions. The economic crisis didn’t only affect the banks but also the brokage companies and many other businesses. As investment and production became hopeless, businesses either closed down or lost the capacity to accommodate their employees; therefore unemployment increased heavily. As Jon Grovett reported: “January 2001 figures released by the Confederation of Turkish Employers Unions (TISK) showed that between July 1999 and November 2000, some 8,123 businesses had shut down countrywide. Job losses over the period were estimated at around 100,000.” In addition, the growth rate expectations could not be met and revised downward. The expectations about the inflation rate were not also met as Gorvett emphasizes: ‘Predictions for the end of year inflation rate have also risen though, with December 2000 wholesale price index growth showing an official overall level of 39 per cent inflation for the year 200 -- nearly 15 points above the government's target.” Finally, with the increasing rates of inflation government had to devaluate the Turkish lira and as Central Bank realized that it was running out of cash, the International Monetary Fund came to help with a $7.4 billion loan.
Since the crises in 1994 Turkey hasn’t witnessed a worse economic turmoil. It was clear that the main reason was not the last moment political dispute, but it was only the last stone that caused the overflow. With this crisis, Turkey started to realize and see the structural economic problems that it pretended not to see before. In fact, the February 19th can be suggested as a turning point not only by causing a serious turmoil; but also by bringing structural changes in to the Turkish economy especially with the traditional anchor, the International Monetary Fund, in order to cure the problem. This new period would be a challenging venture both for Turkey and the IMF. Turkey would enter a period that it has to bring long term stable solutions to its economic problems, and the IMF would take the most critical responsibility since the Russian and Asian crisis while facing criticisms all over the world.
First of all, the reasons of the 2000 and 2001 crises, both long and short term, should be highlighted to be able to understand the impacts of the crises and the role of IMF in them. The problem of banking sector is a major point to be emphasized as a reason of the crises of 2000 and 2001. At one side of this problem there are the public banks and their duty loses that is an important source of the February 2001 crisis. In Turkey, public banks have a large share of %40, where as in most middle income countries with the privatization of the banking system, this ratio is low. In a system where the public banks play a dominant role, the duty loses create problems. For example, when Ziraat Bank provides subsidies to agricultural sector, it mobilizes its resources by offering high interest rates. However, when offering credits to the agricultural sector, it makes politically pressured lending with low interest rates; therefore creating distortions. As Юebnem Oрuz emphasizes: “The public banks, it was argued, were distorting competition for "healthy private banks" by offering high interest rates while accumulating losses by distributing subsidies to farmers, small enterprises and urban housing projects.” To finance this gap is the duty of the treasury; but when the treasury didn’t finance the gap rapidly, these delays cause heavy and costly borrowing for the public banks. This problem is also due to the lack of transparency in the budget which underestimates the problem of duty loses.
The other side of the banking sector problem is about the private banks. First, the open position of private banks which means borrowing foreign currencies at high interest rates made the banks vulnerable to speculative attacks. Since banks are underregulated, they follow a risky path, especially the small banks which want to increase their shares. Another important problem with the private banks is that they have been formed without fulfilling the necessary conditions. The reason for this is the politicization of the new bank entries. This creates a risk for the new bank and leads the collapse of the bank in a short period of time. Finally, the use of connected lending to finance their parent companies creates distortions especially for the small banks and cause bank failures. The editor of the financial daily points this out: “Many of Turkey’s banks are part of larger groups or holding companies. These groups used the banks to finance their other operations through a massive system of bad loans.” These three sources of disequilibrium in the banking system of late 1990’s can be shown as the major causes of the November 2000 crisis and the bank failures in 2001.
Another major factor preparing the 2000-2001 crises is the problem of privatization. There are several reasons that block the privatization program of Turkey. First of all, there is the lack of continuity in the program, and the delays become costly. Once an enterprise is decided to be privatized, then delays affect the morale, reduce its market value and shake the confidence of the managers. In Turkey, the government’s commitment to its own privatization program is doubtful. Jon Gorvett explains this: “Major state institutions have been earmarked for sell-off for some time, with little being done. Partly this is the result of a political deadlock between the tripartite coalition government parties; the far-right nationalists of the National Action Party (MHP) are suspicious of foreign interests taking over strategic industries, the left-leaning Democratic Left Party (DSP) worries about job losses; while the third group, the centre right Motherland Party (ANAP), is more broadly in favor, but is widely mistrusted.” Another reason was the weakness of the legal framework until the 1994 privatization law. In addition, there is the lack of attention given to competition and a regulatory framework for this. We can only witness the activation of the Competition Board in February 1998, and it is clear that privatization isn’t possible without a prior improvement of the board. Finally, the government tradition in Turkey of focusing on increasing cash revenues rather than improving efficiency creates problem. Therefore, Turkey’s massive state sector continues to exist as the populist governments of the 1980’s and 1990’s continued to give subsidies and increase wages rather than privatizing and cutting payrolls.
On the other hand, when the history of Turkish economy is considered, state’s role has always been major in Turkish economy. The base of Turkish economy in 1920’s and 1930’s as a command economy prepared the ground for today where %50 of the land and nearly %60 of economic activities are directly or indirectly run by the state. With the period economy started to liberalize, however compared to the East European countries, Turkey was in the beginning. Since the beginning of the 1990’s those countries mostly completed their privatization where as Turkey was having difficulty to sell a small number of the State Economic Enterprises.
There were also other explanations to Turkey’s 2000 and 2001 crises such as the one that emphasizes the adoption of liberalization policies in spite of the structural weaknesses of Turkish economy. Oрuz points this out: “With the transition to the convertibility of the Turkish lira in 1989, huge amounts of short-term foreign capital poured into the country, where the interest rates were higher than in advanced capitalist countries. This resulted in an over-debted economy. By the end of 2000, Turkey's foreign debt was 55 per cent of its national income (third only to Indonesia and Russia in this regard). Combined with Turkey's pattern of integration with the world economy on the basis of specialization in labor-intensive sectors, this meant its productive capacity inevitably could not endure the debt burden, and could end up with the reversal of all the flows at any time. Whatever the triggering factor in each case, this was the structural cause of three currency crises of April, 1994, November, 2000 and February, 2001.”
Finally there are other reasons such as the large state bureaucracy that is blamed for the troubles in the economy because of blocking the foreign direct investment and their established gifts or family connections. Another one is the huge public sector borrowing that prevents the productive usage of money. It is recorded that in 2000, %88 of the 500 major firms’ profits had the source of lending to the government. This is what causes the vulnerability of the economy to external shocks especially in a very volatile economy like Turkey. The volatile economy and the loose faith in the national currency weakens the economy further by causing a panic whenever something goes wrong in the country. Therefore, the postponement of European Union’s decision about Turkey’s membership, or the political crisis between Ecevit and Sezer were all jitters that benefited from the volatility of Turkish economy. This is why the market lost %5.6 in value and the interest rates doubled following the postponement and why the 2000 economic crisis started after the flying constitution in the air.
In the context of global volatile financial economy, the external factors shouldn’t be missed explaining a crisis. Especially, there are key external factors influencing the November 2000 crisis. First of all the negative developments in one part of the country has started to affect the other parts such as the recent crisis of Argentina effecting Turkey’s economy. Other effects were the external borrowing with high interest rates, the risk prone global financial economy, lower euro and the high energy prices.
On the other hand when explaining the 2001 February crisis separately, the effects of the November 2000 crisis and the effects of the economic program implemented after the crisis are also important. After the 2000 crisis, there was a loss in the confidence for basic policy corrections. While the scale of adjustments required the public and private participants, the market participants concerned about the risks involved with implementing the program. These concerns made the economy more vulnerable to speculative attacks. The relaxation of the policy makers after the November 2000 crisis and the banking sector’s problem of lending on a short term basis were other factors that prepared the way to the 2001 crisis.
After focusing on the reasons, the reform program suggested by IMF and lead by the new minister responsible for economy, Kemal Derviю, to cure the economic turmoil should be highlighted. IMF made Turkey its largest borrower by giving a loan of $15.7 billion. First of all, Turkey’s need for a reform program and aid is clear however the reason for the IMF should be emphasized especially as the crisis had limited effect on the global financial system and as the IMF revised its lending policies with the new Bush administration One of these reasons is Turkey being the second largest army of NATO although it was not as important as in the Cold War period. In addition, being host to the American aircraft that patrols northern Iraq regularly gives an advantage to Turkey. In a period when American planes were striking Baghdad from the military basis in Turkey, Turkey’s importance as an ally in the region increased. Moreover, being the good friend of Israel and having collaboration in armed forces was important. Finally the consideration of IMF about Turkey’s improving relations with the EU and the $40 billion exposure of the Western banks in Turkey made it take the responsibility in the reform and aid process. These criterias for USA are explained by Юebnem Oрuz: “The message was clear: Turkey was not only expected to make all the institutional arrangements to open up its most profitable key national industries and banks to the U.S. and European (mainly German) capital but was also to assume new strategic and military roles in the Eurasian region as assigned by the U.S. and E.U. through NATO. For all this, a symbolic ‘new man’ in Turkish politics was needed.”
This ‘new man’ is assumed to be Kemal Derviю, the new minister of economy. The former vice-president of The World Bank responsible for poverty alleviation programs, this time took the responsibility of the economic reform program. Derviю would manage the economy and direct the Central Bank to build the confidence Turkey lost in the international financial arena. Except being one of Ecevit’s advisors in 1970’s, he was outside of Turkish politics and the IMF. Derviю is found to be the ideal type of leader Turks want to have in one pole. While he was seen as the superman responsible for saving the economy by the public, he also got the support of the leading businessmen, industrialists and powerful generals. He would mainly convince the foreign lenders to give loans to Turkey to cover the liquidity problems. However, neither Europe nor the IMF and the World Bank would give loans if the government cures the problems that caused the crises. Therefore, the IMF brought forth the conditions that made up the reform program. The December three year reform program prepared the monthly devaluation schedule for one year to change the expectations of inflation. Another target was the reduction of deficit by increasing taxes, cutting agricultural subsidies, making the distributions of public pensions more difficult and privatization. In terms of privatization, the IMF warned Ecevit’s government to quicken the privatization of the state owned companies such as the telecom company Turk Telekom and keep the wage increases of the employees in limited terms. Although Turkey was given several IMF programs before, this one was more than the cuts of spending and increases of taxes. The difference was the conditions of privatization laws and pension reforms, in order to get loans. If Turkey fulfills the conditions, IMF would give $4 billion to help the reform process and expects to reduce the inflation into single digit and the public sector deficit to %3 in 2003.
According to these conditions, Kemal Derviю prepared a new economic program called the National Program. Юebnem Oрuz summarizes this program: “It pledged that the major public banks would be merged and privatized in three years. State subsidies to farming would be stopped, public expenditure would be cut by nine per cent, public-sector salaries would be frozen, and state-owned telecommunication, airlines, petroleum, steel, tobacco and spirits, sugar, natural gas and electricity distribution industries would be privatized and opened to global markets. With the "fast track" process now effective in the Parliament.” Derviю promised the IMF to pass the fifteen new laws recommended. In addition to these economic reforms, what Derviю also wanted to do is to separate economy from politics. The columnist of the Yeni Юafak newspaper interprets this: “Derviю will have revolutionized not only the way the economy is run, but the way politics has been ever since a multi-party system was introduced in 1945. When he speaks of the need to ‘divorce politics from the economy,” what he means is stopping the country's many crooked and mediocre politicians from buying votes and influence through jobs and handouts from state banks and institutions. This vicious cycle of patronage and corruption lies at the root of Turkey's financial ills.”
After emphasizing the reforms expected from Turkey by the IMF, the results of the program and Turkey’s performance on fulfilling its promises should be evaluated. First, the evaluation of the economic program after November 2000 crisis is necessary to see its effects on the February 2001 crisis and the changes in the IMF policy towards Turkish economy afterwards. It was clear that Turkey was running a fiscal deficit and needed capital flows. However, the IMF only provided $4 billion that was not enough for the adjustments required by the IMF. In addition, the IMF was implementing in a way its ‘one fits to all programs’ that it develops for each developing country that goes through a crisis without considering the emergent areas that needs help. The IMF focused on the fiscal deficit problem, rather than the banking sector that was requiring immediate reforms. Moreover, another important problem of public sector banks, the duty loses, couldn’t be recovered as long as the IMF borrowings weren’t allowed for financing the treasury and the banking sector didn’t adopt itself to the disinflation program. On the other hand, some effects of the program shook the credibility and the confidence of the market participants further. The interest rates increased in a short period of time that caused difficulty to control the demand that resulted in the surge of imports and therefore current account deficit. As current account deficit was increasing and exports weren’t increasing rapidly, the capital markets started to lose confidence. In addition, the usual slow and nonprogressive attitude of the government when implementing reforms affected confidence. For example, the government showed a strong reaction against the fiscal reforms, progressed slowly in the privatization reforms and while facing the pressures from the agricultural sector, it was reluctant to apply the reform of agricultural subsidies.
In the short run, the plan brought benefits such as the reduction of interest rates to %10 and inflation to %60. The Central Bank’s governor decided to take of some zeros of the Turkish lira. The IMF sent a report that praises Turkey highly and the two foreign rating agencies called Fitch IBCA and Standard & Poor’s upgraded the debt of Turkey. In addition, the conditions for banking sector reform have started to be fulfilled. The Banking Regulation Agency closed two small investment banks and took over the five small banks and in two years this number went up to 18. One of these was sold and some international players were giving offers for a second. To improve the attractiveness of the other eight, they were merged in to two. What Engin Akзakoca, who is the Banking Supervisory Board Chairman promises is, with the end of 2001 the banks that are under the control of state would be liquidated or sold off. In addition, the other side of the problem was also been reformed by closing down a large state owned bank called Emlak Bank and transferring its assets to Ziraat and Halk Bank. Moreover, the state banks don’t have to borrow at punishing interest rates on the overnight credit market with a bond issue raising enough funds. Now what IMF expects to see is their privatization in 2002. According to Pelin Yenigьn, who is the senior economist at Istanbul's Global Securities, the reforms concerning the banking sector are the most significant. She explains why: "The current volatility is making it difficult to see the benefits, but with a healthier banking sector it will be easier to implement macroeconomic policy."
However, the results of the program are not all so optimistic. One of the long term problems can be related with the amount of money IMF is offering. The $7.5 billion is one of the highest amounts offered by IMF but more importantly it was an amount that the markets were expecting, therefore it may bring high risks. Another concern of the analysts is the lack of confidence to the ability of Turkey to sustain its debt load. To sustain the confidence of the investors, the interest rates must fall below %80 and the prerequisite for this, is ability of government to sustain the stability and stick to the reform program.
Therefore, the IMF reforms provided important developments while bringing certain challenges with it. In terms of the progresses, the banking sector restructening with the formation of the bank regulatory and supervisory agency and the success of the structural reforms are included. In addition, there is the low risk of the repeat in the balance of payment problems witnessed in the recent past and the relief from external debt pressure. However, Turkey faces some challenges on the recovery of two major crises. Although Turkey relieved from the pressures of external debt, it has to take in to consideration the large amount of domestic debt while sustaining the high growth. Turkey should sustain growth to prevent the resistance to the reforms and to provide the debt necessary. Therefore, Turkey should focus on policies that would generate sustained economic growth that does not end up with crisis. For this, Turkey should look for policies that would bring long term capital flows, long term competitiveness, and therefore long term growth and for this reason it should have the directive of a powerful anchor such as the EU.
Evaluating the IMF program is not sufficient to understand the role of the IMF in Turkey without bringing an insight to the changing views about IMF in the world and understanding the critiques brought for it. IMF has been criticized since the early 1970’s but more harshly especially after the Asian crisis in which IMF played a very inefficient role. Especially in the context of financial global economy, the criticism directed to IMF increased as it became more difficult to cope with the volatile economy. IMF has started to be criticized with issues such as its political biased distribution of funds or not willing to play the role of global regulation beyond the nation state in the face of global market failures.
However, there have been more deep rooted criticisms against the institution. One of the criticisms is that IMF uses Structural Adjustment Policies to solve balance of payment problems and this makes the less developed countries become dependent on IMF especially not for advice but for assistance. More importantly, rather than preventing the crises before it damages the country’s economy, it intervenes after the crises with its repairing programs which makes the situation more difficult and costly to solve. In addition, by acting as a lender of last resort, IMF creates further dependency. Another criticism is about the IMF conditionality that it expected from the debtor nation to sustain economic balance. It requires many changes from the borrowers, however it couldn’t provide the incentives necessary to meet these conditions and it does not consider the real economy much. These conditions are blamed for lowering living standards and creating social unrest. It protects the interests of the lenders more than the borrowers and is only interested in the small number of merging economies, not the undeveloped ones. Moreover, IMF is also criticized for applying a ‘one fits all’ programs to all suffering economies. In all of the cases what IMF proposes are increasing tax collections, reducing government spending, increasing money supply to increase the interest rates, privatization and a liberal financial structure. Sometimes these policies have no relation with the crises and may cause opposite effects. Another criticism is about the high expectation of IMF about liberalization from the developing world that lack the necessary institutions and the stable financial structures. Finally, IMF has been criticized of not being a transparent institution that is open to the pressures and critics of the public, private and international participants.
In fact, there is a commonality in these critics. As the promoter of free-market since the day it was founded, IMF has been criticized by a common segment of the world. It is generally criticized by the leftists and became the target of the segment that is against the globalization and free trade advocates. IMF, being dominated by the USA, has been calling for free markets, free currencies and free trade in all over the world and imposing the unpopular reforms on countries that have not adopted to free market advocates and that stayed backward on the growth path. Although the IMF is thought to be targeting only the developing world for change it also targets Western governments when necessary. For example in 1976 it wanted the Labor government in Britain to cut the uncontrolled deficit spending. Recently, IMF again asked the current Labor government to cut the unreasonable spending proposals. Although some criticisms seem true, first of all the IMF is not a static institution. It reforms itself when it makes mistakes such as in the case of the Asian crisis of 1997. After the crisis, the IMF especially became cautious for not implementing the one fits all economic reform program and started to take into consideration the differences in the economic problems in different countries. In the Turkish crisis this is evident, as the IMF put emphasis on areas like privatization and pension reforms rather than cutting expenditures like conditions.
Although the IMF has been reforming most of the lacking points that are exposed to criticisms, one of them can’t be cured. As seen in the case of Turkey, the public reaction and the social unrest caused by the effects of the reform program still exists as a problem. When comparing with the previous crises, this time not only the workers were on the streets but also the broad sections of the middle class were paying the debt of the crises. In fact, some measures were given to the small businesses as explained in the article Harsh Medicine: “ ...the crisis unleashed the contradictions between financial and industrial capital. One of the main issues was the post-crisis increase in interest rates on loans given by banks to industrial capital. The state made a huge effort in managing the conflict so as to assure the unity of the capitalist class. On March 26, representatives of the "banking" and "real" sectors were brought together. A joint commission was formed to carry out works on paying the term interests on March 31. On April 9, the government announced extra measures for small businesses. The measures included giving small businesses extra time to pay their term interests, their taxes and social-security premiums as well as lowering the interest rates on their loans to pre-crisis levels. Another interesting measure was a new draft bill on the transportation of large shopping malls to the peripheries of the urban centers!” However, these couldn’t prevent the bankruptcy of 4000 firms and the unemployment of 443,000 people. Therefore, one side of the social unrest was composed of the small tradesman and the artisans who haven’t shown such a reaction before. Even this conservative group rioted on the 11th of April that made the government to ban all of the demonstrations in Ankara for a month. Another different group was the small businessmen who couldn’t form an organized resistance but whose involvement can be transformed into a right wing nationalist reaction. On the other hand %45 of the country, the farmers, were harshly affected with the cut of the state subsidies. This is expected to lead to another wave of migration into the shanty towns in the cities where they would find the Kurdish or Islamist influencers as their shelters.
However, in a country where the urban unemployment was already in low levels before the crises and where approximately 500.000 jobs were also lost since the February crisis, the labor movement would be the strongest opposition. A labor platform was found composed of the associations of the pensioners and professionals and major trade union confederations, also for the first time a labor coalition created its own alternative program. Юebnem Oрuz points out the major policies of the program: “Written by a group of left-wing intellectuals, the Labor Program is a comprehensive policy package calling for the consolidation of public debt, control of short-term international capital movements, an end to privatization, tax reform, planning of industrialization and import controls. It has the merit of showing that Derviю' ‘National Program’ is not the only alternative.”
There were also reactions from the Turkish politicians against the IMF about the program it imposed and the new minister responsible for economy on the basis that he acts in the interest of the USA especially by the leader of the National Action Party. Among the reforms, the main oppositions are about the banking reform and Tьrk Telekom. Jon Gorvett emphasizes the main opposition about the Telekom privatization: “It may give foreign interests control over what the MHP -- and the powerful Turkish military -- see as a vital strategic interest. However, this appears to have been got round by the issuing of a `golden share' to Turkey, meaning that in time of crisis or war it would be able to use the company's telecommunications satellites.”
On the other hand, the new political economic system constructed by the reforms would threaten the interests of the ones who benefited from the previous system in the past. The reason for that is about the aim of Derviю, other than the structural economic reforms, to separate the economy from the politics. The columnist emphasizes the impact of this: “This is bound to meet resistance in a system where it is considered perfectly routine for a minister to static his or her ministry with party colleagues and family members, or to transfer state funds to new projects in their home town, or firms run by relatives. But perhaps all that is now shifting. Those who are opposed to these reforms are elements of the existing political class who are being obliged to slowly exit the stage. MHP, pro-Islamist, social democrat or conservative -- it really makes no difference.”
Among the parties that are disturbed by the reforms, there is the Nationalist Action Party which mainly criticizes the telecoms legislation and Kemal Derviю. The problem about the Tьrk Telekom legislation was the requirement of the IMF to build up the Telecom board with members who are nonpartisan and have high-level management experiences. Against this requirement, Communications Minister was insisting to dominate the Telecom board with his own Nationalist Action Party. On the other hand, as a nationalist party, MHP was disturbed with the involvement of foreign organizations and individuals in Turkey’s internal relations. Therefore, the party was criticizing Kemal Derviю, for acting as a foreign agent by taking orders from USA and their instrument IMF. In addition, the more reactionary Virtue Party was criticizing the lack of cash flows going to the real sector development.
Another criticism is interestingly from the center right. The reason is emphasized by Jon Gorvett: “Here the problem stems from the fact that much of the economic crisis also was caused by widespread corruption, particularly in the granting of government contracts and tenders, political party funding and banking-sector fraud. With the center fight largely dominating government since the reintroduction of party politics in 1983, the mainstream conservative parties--the Motherland Party (ANAP) and the True Path Party (DYP)--both have a lot to lose from any increase in transparency, and from the variety of anti-corruption investigations currently under way.” The other interesting group was the military that was disturbed by the two aspects of the issue. Military was mainly affected by the February crises as the exchange rate controls collapsed and military plans were postponed with the losses in the defense budget. For example, the General Staff announced that they would postpone the $19.5 billion of weapons projects to modernize the army also the amount of the 145 Bell attack helicopters were reduced to 50. Moreover, the military criticized the Telekom privatization that is considered as threatening the national security.
These oppositions weren’t complementary; they were responded back by the damaged market confidence in the Turkish economy and the postponement of the IMF program. The IMF criticized Turkey: “Turkey is playing politics with its recovery program,” and delayed the $3.2 billion funds. The IMF realized that the government hasn’t been conducting the conditions that were required for the implementation of the program. The most apparent problem was the insistence of not appointing non-political, professional members to Tьrk Telekom and keeping the former chairman and sustaining the MHP monopoly in the board. The IMF criticized the divided three-party coalition for the slow and nonimplementation of the reforms and decided to postpone the aid until the coalition showed commitment to the economic program.
However, relations with IMF have started to smoothen and the government has started to understand the significance of the conditions expected from it. The managing director of the IMF, Horst Kohler, reported that he was satisfied with the implementation of the program in his last visit recently. Turkey’s wounded economy has been recovering especially with the encouragement of the Democratic Left Party and the center right Motherland Party and their support for Kemal Derviю, the IMF and the economic program. However, it won’t be right to say that the IMF is a perfect cure to all institution. Although it has also reformed itself, it still fights with its certain missing points in the global financial economy and with the Turkish case it is giving its 21st century examination. This creates the loss of credibility on the IMF in some points, but Turkey shouldn’t look at its relation with the IMF as a zero sum game such as being only interested in how much aid the IMF is providing and how much it is doing for Turkey. Instead, Turkey should gain a more long term vision and should be willing to give some sacrifices in order to become a functioning economy with a liberal democratic society.
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